The clock is ticking. For too long, Germany has managed the transition to a digital and climate-neutral future with a lack of confidence rather than shaping it with self-assurance. The transformation of German industry is one of the greatest challenges in the coming years. If the right course is not set now, the future of the German industrial model is at stake. That is why essential momentum must be generated as quickly as possible through massive public investment.
Germany is the economically strongest country in the European Union, with industry’s share of value creation and prosperity far exceeding the European average. Achieving the EU’s climate goals and securing industrial prospects for the European continent as a whole depend crucially on whether and how Germany succeeds in continuing to generate industrial value creation and develop sustainable technologies and innovations in the future. This requires that the new federal government create the essential framework conditions, provide the necessary investment policy impetus, and present a bold and confident vision for the future of our country and for Europe. Whether this succeeds will also be decisive for the success or failure of a new federal government.
Many industries—with their thousands of companies and employees, and thus entire regions—have long been in a state of upheaval. And companies have long since begun to transform their products, production processes, and business models. Shaping this transformation in a way that is environmentally sustainable, successful in terms of industrial policy, and socially just requires a long-term, reliable, and consistent planning framework, as well as effective support for future technologies. This is the key to mobilizing the necessary private investment.
We must put an end to running the country into the ground. The focus now must be on reliable renewal and accelerated expansion of infrastructure. To strengthen the capacity for innovation and adaptation during the transformation and to trigger an increase in private investment (crowding-in effect), IG Metall and the Federation of German Industries (BDI)—as the leading umbrella organizations of the “Future of Industry” alliance—believe that public investment is absolutely essential at three levels:
- Public investment in general infrastructure (mobility infrastructure, power grids and storage, digital infrastructure)
- Rapid expansion of transmission and distribution grids to meet at least 70 percent of the significantly higher energy demand with renewable energy by 2030. Changes to planning law that significantly accelerate the planning process are essential,
- Expansion of district heating infrastructure to rapidly achieve significant decarbonization of the building sector,
- Establishment of a Europe-wide hydrogen infrastructure as quickly as possible,
- Expansion of the charging station infrastructure in parallel with the ramp-up of e-mobility,
- comprehensive investments in digitalization as a prerequisite for the intermodality of sustainable transportation concepts,
- Expansion of fiber-optic-based gigabit-capable networks all the way to homes and apartments, and coverage of rural areas as a prerequisite for a comprehensive digital transformation, the opportunities of which can be harnessed everywhere. To this end, simplified, digitized permitting procedures, the use of alternative installation methods, smart funding systems that do not crowd out self-funded expansion—which must always take priority—and the consistent recruitment of skilled workers should be ensured. Investment initiatives and collaborations among network operators must be supported,
- as well as comprehensive investments in rail and public transit, which are necessary for the success of the transportation transition.
2.Industrial policy support for the transition to decarbonization, so that market actors can invest accordingly
- In addition to the IPCEI for hydrogen, an IPCEI for the decarbonization of energy-intensive industries should be introduced to close existing funding gaps. Energy-intensive basic industries (including steel and cement) must be supported in the transition to CO2-free production processes—not only through investments but also through additional measures that directly impact companies, particularly for the market ramp-up of hydrogen and related derivatives.
- Funding for battery and semiconductor technologies must be increased rapidly and substantially.
- The European State Aid Guidelines must be designed in such a way that structural policy measures and support can be implemented.
- A new high-tech initiative for the aerospace industry should be introduced, expanding and refocusing the aviation research program on environmental priorities and integrating it into the promotion of the hydrogen strategy. In addition, a technology demonstrator program should be launched. Furthermore, an industrial small-satellite initiative should be launched.
- Small and medium-sized enterprises should be supported in financing investments in new business models.
3.Support for the profitability of sustainable business models in the industrial sector
- To ensure rapid profitability, the operation of electrolysis plants must be supported through Carbon Contracts for Difference.
- To maintain their international competitiveness during the transition process, companies need competitive electricity costs. The industrial electricity price should be significantly reduced by abolishing the EEG surcharge, lowering the electricity tax, and reviewing all levies and surcharges on the electricity price. In doing so, German and European policymakers must give special consideration to the interests of energy-intensive industries.
The financing needs outlined here can be addressed using various instruments. The BDI and IG Metall expect political actors in a potential “traffic light” coalition to reach a swift agreement on possible sources of financing during the exploratory talks and the subsequent coalition negotiations.
Now is the time to seize the opportunity for a new beginning!
IG Metall Chairman Jörg Hofmann and BDI President Siegfried Russwurm commented as follows:
Jörg Hofmann, President of IG Metall:
“We are convinced that an innovative industry can turn the necessary transition toward climate neutrality into an opportunity for growth and employment—provided the framework conditions are right. But they are not. A lack of planning certainty, inadequate infrastructure, and limitations on financing the massive investments required—especially for small and medium-sized enterprises—stand in the way.
What is needed are massive public investments to provide infrastructure and stimulate private investment. We estimate a need for over 500 billion euros in the years leading up to 2030. This also includes enormous efforts to train the workforce and implement active labor market and regional structural policies that prevent unemployment—and we need to act now!
Everyone is called upon to act—businesses, workers, and policymakers. The new federal government now has the opportunity to take the brakes off and thereby secure the future of Germany as an industrial hub and its millions of workers.”
Quote from BDI President Siegfried Russwurm:
“Tackling the priorities for groundbreaking decisions that benefit our country—that must be the guiding principle for the upcoming coalition negotiations. The focus must be on overcoming stagnation and securing competitiveness.
Investment is now the be-all and end-all. There is no alternative to strengthening our economic forces and reaffirming Germany’s status as a nation of industry, exports, and innovation. In addition to a growth program, faster planning and approval procedures—including expedited legal processes—and the launch of administrative reform are essential.
Decisions on energy and climate policy will determine the fate of industry and modern industrial society. It is encouraging that there is a high degree of agreement between the BDI and IG Metall on the need to preserve industrial value creation and employment—and on how to do so.”
Joint Statement by IG Metall and the Federation of German Industries
Further information and press photos of Jörg Hofmann
